15 October 2021

Senator the Hon Eric Abetz
Liberal Senator for Tasmania
By email: Senator.Abetz@aph.gov.au

Dear Senator Abetz

I refer to my correspondence to you on 13 September 2021 regarding your request that I conduct a review in relation to the Australian Broadcasting Corporation (ABC) paying damages and legal costs of one of its journalists for a private defamation proceedings.

In the course of our financial statements audit, we made enquiries regarding the risk identified in your letter. This letter is to advise that the ANAO has now received additional information from the ABC concerning the circumstances surrounding the matter you have referred, including by way of interview with the ABC Chief Financial Officer, former General Counsel, and current acting General Counsel.

ANAO’s understanding of the events

An ABC journalist, Ms Milligan, received a notice on behalf (‘concerns notice’) of Dr Andrew Laming concerning tweets made by Ms Milligan (March and April 2021) in May 2021 (Laming Case).

The legal team representing Dr Laming in the action against Ms Milligan was the same legal team that the ABC was defending itself in separate legal proceedings in the Federal Court. The ABC advised that this, along with the factors set out below, had a potential impact on the ABC’s ability to reach an optimum legal and financial outcome.

The ANAO was advised that between 22 - 25 May 2021, the Managing Director of ABC discussed both legal matters with the ABC’s internal General Counsel and that the matters discussed included:

• the potential liability of the ABC in respect of the publication of the tweets by the ABC journalist, and whether the ABC could be found to be vicariously liable for the journalist’s personal use of social media;
• the risk of the ABC being joined to any proceedings following such a claim of vicarious liability;
• that some of the tweets the subject of complaint by Dr Laming also had reference to matters raised in separate legal proceedings against the ABC, in which the applicant was represented by the same legal team as Dr Laming;
• the identification of the risks to the ABC and the confluence of the two legal matters brought by separate applicants, which meant the ABC would benefit from engagement with the proceedings brought by Dr Laming, and have input into its resolution; and
• the ABC’s obligations under the Public Governance, Performance and Accountability Act 2013 (PGPA Act) and the potential legal options available to the ABC in both proceedings.

Following receipt of legal advice from the General Counsel, the ABC decided that it would meet legal costs and liability in relation to any proceedings arising out of the concerns notice issued on behalf of Dr Laming, and informed legal counsel representing Ms Milligan of this decision. The ABC advised that this decision was made to effectively allow engagement with the complaint by Dr Laming such that both the Dr Laming complaint and the separate legal proceedings could be managed in an optimal and timely manner, and minimise financial exposure. No specific external legal advice was sought in relation to the decision to meet the costs.

On 2 June 2021, Ms Milligan’s legal counsel formally responded to Dr Laming regarding the notice. Dr Laming subsequently filed proceedings in the Federal Court against the journalist on 27 June 2021. Following lodgement in the Federal Court, a formal offer of compromise ($79,000) was made by Dr Laming under the Federal Court process which was accepted by Ms Milligan on 4 August 2021.

ABC Social Media Guidelines

The ABC Code of Conduct determines the appropriate actions for staff and specific guidance is provided within the social media guidelines in relation to social media use. The ABC advised the ANAO that in June 2021 the ABC sought external legal advice on its social media guidelines, including advice concerning its vicarious liability and personal use of social media by its staff. The purpose of this general advice was to identify opportunities to review its internal processes and manage potential legal risks.

After receiving the draft legal advice on 18 June 2021, the ABC’s social media guidelines were updated in August 2021. The updated guidelines were communicated to staff internally with an email from the Managing Director stressing that ABC staff are personally liable for activities on their own social media accounts. The ABC advised that in addition to updating the social media guidelines and procedures, it is developing a program of staff training on compliance with the guidelines following receipt of external legal advice.

Matters raised

The ABC’s advice to ANAO is that the decision to approve payment of the personal damages and legal costs of the ABC journalist was a business decision of the ABC, and the ABC was under no express legal obligation to meet these costs. The ABC advised the business decision placed the ABC in a better position to facilitate a swift resolution to the Dr Laming proceedings and to assist the progress of the separate legal proceedings. To the ANAO’s knowledge there is no documented advice which was prepared to support the appropriateness of the decision to meet the costs of an employee. The proper use of public resources is the duty of the accountable authority, in this case the ABC Board and/or its delegates balancing the perceived business advantages against the financial costs. In the absence of any ABC policy, precedent, or process in place for this payment, in the course of an audit the ANAO would usually assess appropriateness in the context of proper use within the Public Governance, Performance and Accountability Act 2013 definition, which relates to efficient, effective, economical and ethical – along with the auditing principle of materiality. Given the available information, I do not believe I would be able to form a view on the appropriateness of this decision.

These events identified weaknesses and potential areas of risk within the ABC’s framework and practices governing the use of social media by employees, including its implementation and management practices. Management identified that the existing social media framework required improvement.

The ANAO understands that the total liability of the journalist, which will be met by the ABC, will be in the vicinity of $200,000. Any payment is subject to financial audit by the ANAO in the 2021–22 financial year when all relevant payments are expected to be paid.
I hope this information is of assistance to you.

Yours sincerely

Grant Hehir
Auditor-General

13 September 2021

Senator the Hon Eric Abetz
Liberal Senator for Tasmania

By email: Senator.Abetz@aph.gov.au

Dear Senator Abetz

ABC payments to an employee for a private defamation proceeding

I am writing in response to your letter of 17 August 2021 requesting the Australian National Audit Office (ANAO) undertake an investigation in relation to the Australian Broadcasting Corporation (ABC) paying damages and legal costs of one of its employees for a private defamation proceeding. I also acknowledge receipt of your second letter of 26 August 2021 drawing attention to additional facts. I have not published this letter as it contains personal details.

The ANAO has approached the ABC seeking additional information on the circumstances surrounding the matter you have referred. Their response will inform my consideration of whether to conduct further audit or assurance activity. I will advise you of the outcome of this consideration when it is completed.

Yours sincerely

Grant Hehir
Auditor-General